SAN JOSE, Calif. - Investment banking firm Barclays Capital has lowered its forecast in the metal organic chemical vapor deposition (MOCVD) equipment arena.
''With checks suggesting equipment push-outs in Japan due to the earthquake coupled with tool installation delays from a variety of smaller Chinese players, as well as downside to GCL’s publicized goal of ~100 installed tools in 2011, we lower our 2011 MOCVD market outlook from ~900 tools to ~850 tools,'' said C.J. Muse, an analyst from Barclays Capital, in a report.
''And assuming a meaningful decline in China demand in 2012, driven by industry consolidation and a policy shift towards the demand side, partially offset by a demand pick-up in Korea/Taiwan, we initiate our 2012 MOCVD market outlook of ~700 tools,'' he said.
The total MOCVD tool market was close to 800 unit shipments in 2010, according to the firm.
The new forecast follows a dip for LED demand. MOCVD is one of the critical tools used in LED production. Aixtron, Nippon Sanso and Veeco are battling each other for share in the MOCVD arena.
On Monday, Veeco Instruments Inc. posted sales of $254.7 million in the quarter, compared to $134.8 million a year ago. Net income was $53.1 million in the quarter, compared to $22.8 million a year ago. EPS was $1.25 in the quarter, compared to $0.54 a year ago.
Veeco was projected to earn $1.21 on sales of $246.68 million for the quarter, according to Zacks.
In a statement, John Peeler, Veeco’s CEO, said: “As expected, revenues were down 15 percent sequentially, but increased 89 percent from the prior year first quarter. LED and solar revenues were $215 million and Data Storage revenues were $40 million. We continued to experience strong demand for MOCVD systems and, while China remained the majority of our bookings, we also received orders from key customers in Taiwan, Korea and the U.S.”
Veeco’s second quarter 2011 revenue is currently forecasted to be between $255 and $285 million. Earnings per share are currently forecasted to be between $1.08 to $1.32 on a GAAP basis.
“We currently forecast Q2 2011 orders at 25 percent or more above the Q1 level, and we have visibility for continued order strength through Q3,” added Peeler. “We expect MOCVD order patterns to remain lumpy from quarter to quarter depending upon the timing of customer deposits. We see order strength continuing in China as it builds its LED infrastructure for solid state lighting, and quoting activity in Korea and Taiwan is also picking up with improved utilization rates being reported at key customers. Orders for our Data Storage products should also improve sequentially as customer quoting activity for technology and capacity buys are improving to support anticipated hard drive unit growth in the second half of 2011.”
Rival MOCVD vendor Aixtron AG is set to report its results on Thursday (April 28). ''Driven by the incremental push-outs from China and Japan, we look for Aixtron to report March Q revenues of ~EUR200 million vs. consensus of EUR210 million. And factoring in the appreciation of the Euro and the resultant negative impact to gross margins, we model 1Q EPS of EUR0.47, below consensus of EUR0.52,'' Muse said.